Australia Becomes First Major Economy to Hike Rates in 2026 (1)

Australia’s central bank raised its key interest rate Tuesday, the first major monetary authority to hike this year, after judging inflation pressures were persistent enough to warrant renewed restraint.

The Reserve Bank’s board increased its cash rate to 3.85% from 3.6% in a unanimous decision, partially reversing one of the shortest and shallowest easing cycles last year.

The result was anticipated by most economists and traders, and reflects data showing a stronger economy running up against capacity constraints.

The RBA’s move makes it an outlier among many economies, most of which still have more room to ease. The US Federal ...